Oracle’s Ellison Takes a Pay Cut

Larry Ellison is usually among the highest compensated executives in business. But in the current fiscal year the Oracle CEO will only draw a base salary of $1, down from $1 million annually for the past three years.

Bloomberg News

Oracle CEO Larry Ellison

The change puts Ellison in the same category as his friend, Apple CEO Steve Jobs, who also draws $1 in base pay per year. It was revealed in a proxy statement that Oracle filed with the SEC on Friday–which happened to be the same day that the Journal reported that Ellison realized just over $124 million through exercising stock options in April, more than any other Silicon Valley CEO so far this year.

Ellison’s pay cut was one of several signs that the economy was affecting Oracle—and how it compensates its senior leaders. For instance the only named executive to finish the fiscal year with options “in the money,” meaning that they had a paper value above their issue price, was CFO Jeff Epstein, who joined the company in September.

Oracle reported revenue of $23.3 billion and a $5.6 billion profit for fiscal 2009, which ended in May. Both were up slightly from a year earlier, but well below the double-digit growth rates Oracle has reported in recent years.

And four of the six executives named in the proxy statement received cash bonuses “far below” their target amounts, according to the filing. Keith Block, who heads up the Oracle’s North America Sales and Consulting business, didn’t receive a cash bonus at all. Oracle still valued Block’s compensation for the year at more than $8 million, with most of that coming from past options that have vested.

The company valued Ellison’s compensation for the year at $56.8 million, about $3.6 million of which was a cash bonus—down from $10.8 million in fiscal 2008, a year in which he realized $544 million through exercising options.

An Oracle spokeswoman declined comment on the disclosures, though the filing says Ellison “agreed” to the salary change. At Oracle’s annual meeting last October investors turned down a “say on pay” proposal, but one warned that Ellison risked becoming a “poster boy” for excessive executive pay if the Oracle board didn’t take their concerns seriously.